Steemit Crypto Academy Week 7 Task: Stable coins 2 - Digix (DGX) | lecture by @yohan2on

Thanks to @yohan02 for this wonderful lecture about Stable coin Part2.

A “stable” coin is a digital asset or cryptocurrency that is tied to fiat currency or other financial assets.
On the assignment, I'll be writing about Digix (DGX)

Caption from

It all begins with DigixDAO.

What is DigixDAO

DigixDAO created a new cryptocurrency backed by real gold bars.
DigixDAO stands for Digix Decentralized Autonomous Organization and is a decentralized group of participants who make decisions about the development of the Digix Global ecosystem.
Participants purchased DGD tokens during "the first ever massive sale on the Ethereum blockchain. "
DGD token holders have the right to make decisions on any proposal submitted to DigixDAO.
For voting and making decisions on the development of Digix, DGD holders receive a reward paid by the DGX token, which is equivalent to 1 gram of gold.
The purpose of gold tokenization is to ensure stability and preservation of value in the cryptocurrency space.
Bitcoin is often referred to as digital gold, but DigixDAO is bringing the ability to own physical gold to the digital space.

Proof of Asset
Digix uses the Proof of Asset (PoA) algorithm to distribute DGX tokens equivalent to one gram of gold. This process includes a record of taking ownership of an asset on the Ethereum blockchain and the creation of PoA Asset Cards.

Digix Gold Token

Digix Gold Token is also a centralized model, but it may be preferable: it does not depend on the US dollar,
will slowly increase in value, making it the best investment option.
Digix Gold Token (DGX) is pegged to a gold bar. Auditors and vaults digitally sign the reports and post them on the Ethereum blockchain: this is proof that gold is indeed there.
While gold is stored centrally, governance is decentralized in the DAO. DGX holders pay a small fee to cover the cost of storing gold.
The Digix Proof of Origin Protocol is of paramount importance and has tremendous potential. It provides robust mathematical validation of real-world OTC (Over-The-Counter) assets. The same cryptographic protocol can be applied to silver, platinum, palladium, precious stones, art, real estate, and other valuables.
DGX launched in May 2018 and is available on Airswap, Kyber, and other exchanges.

How DGX tokens work
DGX tokens are created using a smart contract that receives PoA cards and generates DGX for every gram of gold.
For example, if a 100-gram PoA card comes to a smart contract, 100 DGX tokens will be created and sent to the Ethereum wallet.
This means that Digix does not engage in partial back-up transactions. Each DGX token is always equal to one gram of gold and is divided into fractions of 0.001 g each.
Associated with DGX tokens are two types of fees associated with storing and protecting gold.
There is a storage fee of 0.60% per year, as well as a 0.13% fee when transferring DGX using an Ethereum wallet. However, Digix planned to change storage fees during the first year of operation.
In addition to generating DGX tokens using PoA cards, the reverse process is also possible. Converting DGX tokens back into PoA cards and then into physical gold bars will cost you 1 DGX.
The weight of the gold bar you are applying for must also be a multiple of 100 grams, and you can either pick up your bar in person or, depending on the country, have it delivered.

Features of DGX
DGX tokens are at the heart of DigixDAO and address two issues.

• They are designed to simplify and reduce the cost of owning and cashing gold assets.
• DGX provides much-needed stability for cryptocurrencies.

Total Volume of DGX
The total supply of DGX tokens will depend on the demand for gold and the size of the vaults. The first vault Digix works with could hold approximately $ 2 billion in gold.
Therefore, if the new gold standard DGX becomes popular, the number of storage will have to be increased.
If the DGX token representing gold proves to be successful, there are plans to create more tokens for silver and other precious metals.
A 0.13% transaction fee and one-third of the DGX storage fees go towards the DigixDAO team.

DGX Partnership with stablecoins
Dai Stablecoin will be backed by DGX as collateral. Dai aims to " create a decentralized stablecoin pegged to $ 1 and backed by diversified collateral held on the blockchain."

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Thanks to you all for reading though

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